Mostly the same old, same old for the stock market. This is the fifth straight up week. Implied volatility on options slides some more. Stock indices trade in a narrow range all week and end higher. Wash, rinse repeat, that is the same basic outline for this entire rally off the February lows.
Gold, on the other hand shows some spark. Some are seeing a breakout from a pennant. There is some overhead resistance at the old high. However, breakouts into resistance sometimes work out real well. I wasn't on this train when it left, so am reluctant to chase that train. Well, I did have what for me have become the usual low risk, low reward position of being short way out of the money puts. The delta is nearing zero so my GLD exposure is nearing zero.
TLT has provided some excitement. Again, so many in the popular media are saying bonds are going down, that the contrary play is to buy bonds, or sell the puts as I have. The implied volatility is relative low on the May TLT puts, so I am reluctant to sell a new batch. Those betting on a big decline in bonds are in a way betting on a strong rebound in the overall economy. I have a difficult time seeing that scenario, but lately my predictions have been bad and worse.
Long GLD, SPY, TLT
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